T O P -T I E R R E P O R T 2 0 1 8 M I D -Y E A R R E A L E S TAT E R E P O R T
CONTENTS INTRODUCTION 3 NATIONAL SUMMARY
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VANCOUVER 8 CALGARY 17 GRE ATER TORONTO ARE A
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MONTREAL 34
I N T R O DUC T I O N Sotheby’s International Realty Canada’s Top-Tier Real Estate Report is a bi-annual study highlighting market trends for residential properties with values over $1 million in Canada’s largest urban 1 centres. It is the only Canadian report to compare data for sales volume, average days on market and percentage of properties sold over asking price for condominiums, attached homes and single family homes sold between $1–2 million, $2–4 million and over $4 million on MLS. As the benchmark price for conventional housing is above $1 million in several metropolitan markets across the country, the report also provides insight into the price and market performance of luxury real estate in a sampling of premier Canadian neighbourhoods. This report analyzes year-over-year data and key market variables for 2018, offering insight into trends in the market for real estate over $1 million in Vancouver, Calgary, the Greater Toronto Area (GTA) and Montreal. A database of active and sold listings is also available on the Sotheby’s International Realty Canada website at sothebysrealty.ca.
1 The information contained in this report references market data from MLS boards across Canada. Sotheby’s International Realty Canada cautions that MLS market data can be useful in establishing trends over time, but does not indicate actual prices in widely divergent neighborhoods or account for price differentials within local markets. This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information and analysis presented in this report, no responsibility or liability whatsoever can be accepted by Sotheby’s International Realty Canada or Sotheby’s International Realty Affiliates for any loss or damage resultant from any use of, reliance on or reference to the contents of this document.
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NA T I O NAL S U M M A R Y Under duress from rising interest rates, the constraints of stricter qualification rules for mortgage borrowers imposed by the Office of the Superintendent of Financial Institutions (OSFI), and the rollout of multiple policy and taxation measures aimed at addressing housing affordability, Canada’s top-tier real estate markets remained fragmented in the first half of 2018, as performance adjusted from city to city. While gains in Montreal’s $1 million-plus residential real estate market continued unabated and the Greater Toronto Area (GTA) market experienced a renaissance in consumer confidence following its temporary lull in the latter half of 2017, sales over $1 million in Calgary and Vancouver retreated as real estate consumers were sidelined by external pressures. Top-tier sales activity in the City of Montreal continued its upward trajectory from 2017 uninterrupted by provincial or municipal policy interventions, and seemingly unencumbered by rising interest rates and stricter mortgage guidelines. However, there were hints that gains in the $1 million-plus market will level off in the third quarter of 2018. Overall, residential real estate sales over $1 million (condominiums, attached and single family homes) experienced a 24% year-over-year increase in the first half of 2018 with 460 properties sold, while luxury sales over $4 million maintained ground with three units sold compared to five in the first half of 2017. In the Greater Toronto Area (Durham, Halton, Peel, Toronto and York), market confidence and top-tier sales activity renewed in the first half of 2018 as consumer psychology recovered from the April 2017 introduction of the Ontario Fair Housing Plan, particularly within the City of Toronto. Given unprecedented gains in GTA $1 million-plus sales volume from 2015 to 2017, with surges of 56% in 2015 over 2014, 65% in 2016 over 2015, and 41% in the first half of 2017 over the first half of 2016, year-over-year comparisons of 2018 to 2017 sales activity mask the market resurgence underway. On the surface,
$1 million-plus residential real estate sales fell 46% year-over-year to 7,684 properties sold in the first half of 2018, while sales over $4 million fell 51% to 127 units sold. However, 2018 sales volume trended above 2015’s healthy levels: GTA $1 million-plus real estate sales in the first half of 2018 increased 25% from the 6,152 units sold in the first half of 2015, while sales over $4 million were up 72%. Additional indicators, including the fact that 25% and 41% of $1 million-plus property sales in the GTA and City of Toronto took place above list price, also suggested a robust market in the first half of 2018. The top-tier market in the City of Calgary regressed in the first six months of 2018. Rising interest rates and the introduction of stricter federal mortgage rules that constrained the borrowing capacity of homebuyers had a disproportionate effect on a city still recovering from a severe economic downturn, stalling incremental gains made in 2017. Overall sales of $1 million-plus real estate decreased 11% year-over-year in the first six months of 2018, as rising supply and slowing absorption rates placed downward pressure on pricing. In the City of Vancouver, in face of the Government of B.C.’s February 2018 implementation of a 30-point plan for housing affordability, coupled with the cascading effects of governmental policies implemented since 2016 to overcome the region’s affordability challenges, the $1 million-plus single family home market saw a significant pullback in activity, while the condominium and attached home markets remained resilient. Overall, residential real estate sales over $1 million decreased 19% year-over-year to 1,939 units in the first six months of the year, and $4 million-plus sales decreased 47% to 111 units as consumer confidence and market engagement waned. The most dramatic slowdown was in the single family home market, which entrenched into buyers’ territory as sales over $1 million and $4 million fell 36% to 885 homes sold, and 55% to 86 homes, respectively.
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Top-tier real estate market performance in the first half of 2018 reflected the following trends:
EROSION OF CONSUMER BUYING POWER RECHANNELS DEMAND TO $1 MILLIONPLUS VANCOUVER, TORONTO CONDOMINIUM MARKETS Tightened mortgage lending rules and rising interest rates eroded the purchasing power of homebuyers, rechanneling an additional cohort into the already heated top-tier condominium and attached home markets of Vancouver and Toronto. From record highs in 2017, sales of Vancouver condominiums over $1 million rose 9% year-overyear in the first half of 2018 to 708 units sold, while luxury condo sales over $4 million rose to 23 units, up 35% compared to the first half of 2017. In 2017, the GTA’s top-tier condominium market performance had surpassed that of other major Canadian markets, with $1 million-plus and $4 million-plus sales recording 59% and 91% year-over-year gains in the GTA region respectively, while rising 35% and 82% yearover-year in the City of Toronto. In the first half of 2018, condo sales over $1 million in the GTA dipped 13% from these record heights to 658 units sold, while sales over $4 million decreased 40% year-overyear to nine properties sold in the first half of 2018. During this time, $1 million-plus condominiums in the City of Toronto fell 8% to 599 units sold, while luxury condo sales over $4 million were down 44% compared to the same period last year.
ENDURING AT TACHED H OME SCARCIT Y IN VANCOUVER, TORONTO, MONTRE AL Following an upward trajectory in year-over-year sales gains that exceeded half a decade, top-tier attached home sales in the GTA and Vancouver pulled back from their record 2017 levels, constrained by scarce supply. In spite of this, attached homes remained
sought after, as demand for alternatives to single family homes strengthened and absorbed supply. In both regions, attached home sales over $1 million commanded the highest percentage of sales above asking price, and amongst the lowest number of average days on market out of the residential housing types. In the first half of 2018, GTA attached home sales over $1 million fell 42% from 2017 levels to 806 units sold, while sales in the City of Toronto fell 25% to 687 units sold. However, 57% of $1 millionplus attached homes sold above list price in the GTA in 2018 after spending an average of 15 days on the market; 65% sold above asking price in the City of Toronto at an average 12 days on the market. This represented the highest percentage of above-list sales, and the shortest number of days on market for residential housing types in the city’s $1 million-plus segment. In Vancouver, 346 attached homes sold over $1 million in the first half of 2018, down a marginal 3% compared to the same period in 2017. 30% of these sales took place above the asking price after spending an average 24 days on the market – the highest percentage and amongst the lowest number of days out of the housing types. Meanwhile, the top-tier attached market in Montreal surged in the first half of 2018. Sales over $1 million increased 58% year-over-year to 171 units. The average number of days on market for attached home sales over $1 million decreased to 49 days, the lowest of the housing types, while 22% of attached homes sold over $1 million did so above list price, the highest percentage amongst the housing types.
HE AVIER BORROWING COSTS WEIGH ON VANC OU VER, CALG ARY AND GTA SINGLE FAMILY H OME MARK E TS Rising mortgage rates combined with stricter OSFI lending guidelines weighed on the $1 million-plus single family home markets of Vancouver, Calgary and the Greater Toronto Area, as
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potential homebuyers, particularly those in the market for homes under $2 million, confronted new hurdles to affordability. Combined with potent policy headwinds in Vancouver, continued economic pressures in Calgary, and inventory build-up in both, the western Canadian markets faced the steepest market adjustments. The City of Vancouver’s $1 million-plus single family home market experienced a dramatic slowdown in the first half of 2018, with $1 million-plus sales down 36% year-over-year to 885 homes sold and sales over $4 million down 55% to 86 homes sold. This was in sharp contrast to the city’s healthy top-tier condominium market performance. As a result, price reductions and re-listings below original asking prices have become common practices, while once endemic bidding wars have largely evaporated. In the City of Calgary, sales over $1 million experienced a 13% decrease in activity in the first six months of 2018 to 304 homes sold, while the luxury $4 million market remained quiet. Overall activity in the GTA’s market for single family homes over $1 million maintained healthy levels in the first half of 2018, as consumer confidence renewed. The cooling effects of the mortgage stress test and rising borrowing costs were largely restricted to home sales under $2 million. Relative to 2017’s historic sales highs, GTA sales over $1 million declined 49% year-over-year to 6,220 units sold in the first half of 2018, while sales over $4 million fell 52% to 116 units sold. In the City of Toronto, 2,240 single family homes sold during this time, down 39% year-over year, while sales of $4 millionplus luxury homes fell 53% year-over-year to 80 units sold.
M O N T RE A L P O SITIO NED A S CA N A DA’S TO P TIER MARKET OUTLIER Montreal was a distinct outlier within Canada’s top-tier real estate markets in the first half of 2018. Following 20% and 33% yearover-year gains in the $1 million-plus and $4 million-plus segments respectively in 2017, the City of Montreal was the only major
Canadian city to see gains in sales over $1 million in the first half of 2018 with a 24% increase. With stability in the economy and labour market, and with Montreal insulated from affordability-driven housing policies and taxes recently implemented in other provinces such as Ontario and British Columbia, consumer confidence and activity continued unabated. As a result, the city’s overall gains in top-tier sales activity eclipsed that of other major metropolitan centres.
CANADA-U.S. TENSIONS ESCAL ATE CONSUMER ANXIETY Friction between Canada and its largest trading partner, and concerns about the potential fall-out of escalating global trade tensions, pose tangible risks to the Canadian economy and to consumer confidence in the top-tier housing market. The revocation of Canada’s exemption from U.S. steel and aluminum tariffs, concerns of potential U.S. tariff expansion, stalled progress in NAFTA negotiations and volatile swings in the global stock markets are some of the external risks facing the Canadian economy in 2018. As a result, the International Monetary Fund forecasted that Canadian economic growth would slow to 2.1% per cent from 3% in 2017 – one of several major institutions to caution a slowdown. While the outcome of these factors remain to be seen, consumer psychology has a strong influence on real estate activity, and rising anxiety has the potential of disrupting the market. As Canada enters the latter half of 2018, these external risks now pose a stronger influence on the top-tier real estate market than in the recent past. Upcoming domestic policy decisions, including pending Bank of Canada interest rate announcements, will carry greater weight in housing market performance given these new vulnerabilities.
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Vancouver TOP-TIER REPORT 201 8 MID -Y E AR RE AL ESTATE REP ORT
V a n c o u ver M A R K E T SUMMARY1 Following a 5% year-over-year contraction in top-tier real estate market activity in 2017 compared to 2016, $1 million-plus residential real estate sales in the City of Vancouver slackened in the first six months of 2018. While the city’s condominium market remained robust, Vancouver’s $1 million-plus detached home market saw a significant reduction in activity, a result of buyer uncertainty, wavering supply, and the cascading consequences of governmental policies incrementally implemented since 2016 in an effort to curtail escalating prices and address the region’s affordability concerns. Building on policy introduced in 2016, the Government of B.C. took bold steps in February 2018 with the implementation of a 30-point plan for housing affordability. The plan outlined several measures aimed at further cooling price escalation including: an increase to the pre-existing 15% foreign home buyers tax to 20% and its expansion beyond Metro Vancouver, the increase of the Property Transfer Tax on $3 million-plus homes from 3% to 5% for the portion of the value over $3 million, an increase of annual school (property) taxes for the portion of assessed value above $3 million, and the introduction of a new speculation tax on 0.5% of taxable assessed value for the 2018 tax year and 2% thereafter. These factors, along with new federal mortgage lending rules that limited the borrowing capacity of local buyers, further eroded the accessibility of the conventional real estate market and the single family home market in particular, and cast shadows on consumer confidence. As a result, $1 million-plus single family home sales
decreased 36% from 2017 levels to 885 homes sold in the first six months of 2018. Demand was redirected into the already heated $1 million- plus condominium and attached home markets, the only viable options for many home buyers seeking to purchase or upgrade, increasing competition and placing further stress on purchasers within these segments. Overall residential real estate sales (condominiums, attached and single family homes) over $1 million decreased 19% year-over-year to 1,939 units in the first six months of the year, while $4 million-plus sales decreased 47% to 111 units sold compared to the same period in 2017. While the decline in overall sales was largely attributed to decreasing activity in the single family home market, sales volume in Vancouver’s $1 million-plus condo and attached home markets normalized from the fevered highs of 2017, but remained healthy. In the first six months of the year, $1 million-plus condo sales increased 9% when compared to the same period in 2017, to 708 units sold. The luxury condominium market exhibited the strongest performance across all product types and price categories in Vancouver, with $4 million-plus condo sales increasing 35% to 23 units sold in the first six months of 2018. As demand across the single family home market continued to taper, sellers relisted properties at lower prices to attract offers. Despite this, buoyed by price gains in the condominium sector, the MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver reached $1,094,000 in May 2018, 2 an 11.5% year-over-year increase. At the same time, the Teranet-
1 The information contained in this report references market data from MLS boards across Canada. Sotheby’s International Realty Canada cautions that MLS market data can be useful in establishing trends over time, but does not indicate actual prices in widely divergent neighborhoods or account for price differentials within local markets. This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information and analysis presented in this report, no responsibility or liability whatsoever can be accepted by Sotheby’s International Realty Canada or Sotheby’s International Realty Affiliates for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. 2 Real Estate Board of Greater Vancouver, May 2018
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National Bank House Price Index for Vancouver increased 15.42% 3 year-over-year. Leading into the third quarter of 2018, it is expected that buyers’ market conditions will entrench in the $1 million-plus single family home market as inventory rises, as market uncertainty continues to stall buying and selling decisions, and as affordability and borrowing constraints continue to limit the pool of qualified buyers. Conversely, the condo market is projected to maintain sellers’ market conditions as demand from various segments of the population continue to drive up pricing.
CONDOMINIUMS Relative to the single family and attached home markets, the $1 million-plus condominium market exhibited strength in the first half of 2018. New mortgage lending rules and rising interest rates restricted borrowing capacity, generating new demand from multiple buyer groups including first time home buyers, downsizers, and international purchasers priced out of the single family and attached home markets. Following the 27% year-over-year surge in $1 million-plus condominium sales to record highs in 2017, year-over-year gains were muted in the first half of 2018. While the $1 million-plus condominium market remaining the most active segment of the market, there was a 9% year-over-year increase in activity in the first six months of 2018 to 708 units sold, compared to 648 sold in the same time period last year. The $1–2 million segment of the market saw a year-over-year increase of 17% with 603 homes sold. The $2–4 million segment of the market saw a dramatic decrease in sales volume, with a 30% dip in sales to 82 condominiums sold. In contrast to 2017, Vancouver’s $4 million-plus condo market exhibited strong gains in the first six months of the year with 23 units
selling, a 35% year-over-year increase in sales. Further, average days on the market decreased sharply from 44 days in the first six months of 2017 compared to 22 days in the first half of 2018, signalling negligible impact from governmental intervention and policy on the highest priced segment of the condo market.
AT TACHED H OMES Demand persisted in Vancouver’s $1 million-plus attached home market, fueling further price acceleration. Following significant momentum in recent years, with sales peaking 13% year-over-year to 690 units sold in 2017, the $1 million-plus attached home market experienced a slight contraction between January 1– June 30, 2018. This was attributed to an acute lack of attached home supply and constrained purchasing power amongst buyers impacted by the newly imposed mortgage lending rules. Overall sales of $1 million-plus attached homes maintained ground with a nominal 3% dip in the first six months of 2018 to 346 homes sold, compared to 358 homes sold during the same period of 2017. Sales volume in the $1–2 million segment of the market decreased 2%, and the $2–4 million price category saw a 12% decline in sales with 30 homes sold in the first six months of 2018. Minimal activity occurred in the $4 million-plus segment of the market where two homes sold in the first six months of 2018, compared to three in the same time period last year. Notably, 30% of attached homes over $1 million sold above list price, the highest percentage of all housing types across the $1 million-plus market.
SINGLE FAMILY H OMES Vancouver’s $1 million-plus single-family home market experienced a drastic slowdown during the first half of 2018, with sales down
3 Teranet-National Bank House Price Index, May 2018
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36% year-over-year. 885 homes sold compared to 1,379 in the same period in 2017. Government interventions such as the new mortgage lending rules, increased foreign buyers’ tax, and the school tax on homes over $3 million cast uncertainty across the top-tier single family home segment, stalling the market as both sellers and buyers hesitated to take action. Sales between $1–2 million experienced a 35% decline to 435 homes sold in the first six months of 2018, compared to 672 homes sold in the first six months of 2017, largely due to local affordability constraints inflamed by rising interest rates and stricter mortgage guidelines. This motivated buyers to seek lower-priced alternatives such as condos and attached homes. Similarly, sales in the $2–4 million segment of the market decreased 29% to 364 homes sold in the first six months of 2018. The most significant slowdown was seen in the the $4 million-plus segment of the market with a 55% reduction in sales to 86 homes sold in the first six months of 2018, compared to 191 homes sold in the same period last year.
single-family home in Vancouver East increased 2% year-over4 year to $1,543,600 in May 2018 . Meanwhile, the benchmark price of a single family home in Vancouver West decreased a nominal 5 4.4% to $3,430,500 . In the traditional luxury neighbourhoods of Shaughnessy, Kerrisdale, and Point Grey/UBC, average single family home prices were $7,866,210, $2,929,142 and $4,945,159 respectively in the first half of 2018. In spite of a positive outlook for the Vancouver economy, with a strong 2.9% gain in real gross domestic product forecast by the 6 Conference Board of Canada and a 4.1% unemployment that was 7 down 1.1% year-over-year in May 2018 , elevated housing prices and tightened borrowing capacity are expected to pose longstanding challenges across the conventional and top-tier real estate markets. While the condominium and attached home markets are expected to remain more resilient, the $1 million-plus single family home market is expected to cool leading into the third quarter of 2018.
Prices have started to adjust in Vancouver’s top-tier single family home market, a residual effect of inventory build-up and the slowdown in real estate consumer decision making. Price reductions and re-listings below original asking prices have become common practices, while bidding wars, once the norm in Vancouver’s $1 million-plus market, have largely dissipated. 15% of $1 million-plus single family homes sold above asking price in the first half of 2018 compared to 31% in the same period last year. Despite the shifting ground on prices, single family homes remained out of reach for many in the City of Vancouver, with affordability remaining a key concern and market influencer for buyers in both the conventional and luxury markets. The benchmark price of a 4 Real Estate Board of Greater Vancouver, May 2018 5 Real Estate Board of Greater Vancouver, May 2018 6 Conference Board of Canada, Metropolitan Outlook 1: Vancouver, Spring 2018 7 Statistics Canada, May 2018
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V a n c o u ver O V E R A L L M A R K E T # of Units Sold
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
1,352
476
111
Jul 1- Dec 31 2017
1,296
430
171
Jan 1 - Jun 30 2017
1,507
667
211
Avg. # of Days on Market for Solds
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
26
39
66
Jul 1- Dec 31 2017
25
33
61
Jan 1 - Jun 30 2017
27
31
51
% of Homes Sold Over List Price
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
26%
16%
8%
Jul 1- Dec 31 2017
29%
18%
10%
Jan 1 - Jun 30 2017
37%
27%
14%
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V a n c o u ver C O N D O M I N I U M S # of Units Sold
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
603
82
23
Jul 1- Dec 31 2017
530
86
21
Jan 1 - Jun 30 2017
514
117
17
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
21
34
22
Jul 1- Dec 31 2017
25
32
41
Jan 1 - Jun 30 2017
23
29
44
% of Homes Sold Over List Price
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
30%
18%
22%
Jul 1- Dec 31 2017
31%
17%
14%
Jan 1 - Jun 30 2017
31%
13%
24%
Avg. # of Days on Market for Solds
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V a n c o u ver A T T A C H E D H O M E S # of Units Sold
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
314
30
2
Jul 1- Dec 31 2017
288
39
5
Jan 1 - Jun 30 2017
321
34
3
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
25
20
7
Jul 1- Dec 31 2017
23
22
13
Jan 1 - Jun 30 2017
23
35
53
% of Homes Sold Over List Price
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
31%
17%
50%
Jul 1- Dec 31 2017
34%
23%
40%
Jan 1 - Jun 30 2017
44%
41%
33%
Avg. # of Days on Market for Solds
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V a n c o u ver S I N G L E F A M I L Y H O M E S # of Units Sold
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
435
364
86
Jul 1- Dec 31 2017
478
305
145
Jan 1 - Jun 30 2017
672
516
191
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
35
42
79
Jul 1- Dec 31 2017
27
35
65
Jan 1 - Jun 30 2017
31
31
52
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
17%
15%
3%
Jul 1- Dec 31 2017
24%
17%
8%
Jan 1 - Jun 30 2017
37%
29%
13%
Avg. # of Days on Market for Solds
% of Homes Sold Over List Price
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V a n c o u ver S A M P L E N E I G H B O U R H O O D S Condominiums
JAN 1 - JUN 30, 2018
# of Units Sold
Avg. Sold Price
Avg. Days on Market for Solds
C O AL H A R B O U R
94
$2,324,083
21
K E R R I S DAL E
27
$1,309,151
36
POINT GREY / UBC
15
$1,084,126
27
S H AU G H N E S S Y
2
$524,000
10
266
$1,197,938
19
Attached Homes
# of Units Sold
Avg. Sold Price
Avg. Days on Market for Solds
C O AL H A R B O U R
3
$2,073,296
28
K E R R I S DAL E
4
$1,243,250
78
POINT GREY / UBC
8
$1,408,250
18
S H AU G H N E S S Y
2
$2,299,950
67
YAL E T O W N
18
$1,894,388
17
# of Units Sold
Avg. Sold Price
Avg. Days on Market for Solds
C O AL H A R B O U R
0
N/A
N/A
K E R R I S DAL E
21
$2,929,142
38
POINT GREY / UBC
44
$4,945,159
36
S H AU G H N E S S Y
19
$7,866,210
87
YAL E T O W N
0
N/A
N/A
YAL E T O W N
Single Family Homes
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Calgary TOP-TIER REPORT 201 8 MID -Y E AR RE AL ESTATE REP ORT
Calgary MARKET SUMMARY1
condo prices softened in the first six months of the year as rising supply outweighed demand.
Following a modest 11% increase in $1 million-plus sales volume in 2017 over 2016, the City of Calgary’s top-tier market experienced a regression in the first six months of 2018. The reversion was largely attributed to rising interest rates and the introduction of stricter federal mortgage rules that constrained the borrowing capacity of home buyers, which stalled progress in a city still recovering from a severe economic downturn. A delayed start to the spring market due to prolonged winter weather conditions also played a role. The slowdown was experienced across the conventional and top-tier markets, and across all housing types, with the high-end condominium segment facing the most acute challenges.
The outlook for Calgary’s top-tier real estate market reflects the tenuous state of the city’s economic recovery, which has not been strong enough to withstand the impact of recent changes in lending conditions and interest rates. While Calgary’s unemployment rate 4 was 7.7% in May 2018, a slight decrease of 1.6% year-over-year , gains in wages in the first six months of 2018 have remained weak and recovery has been uneven across sectors.
Overall sales of $1 million-plus residential real estate (condominiums, attached and single family homes) decreased 11% in the first six months of 2018, with 350 units sold compared to 395 units sold in the first six months of 2017. The $1 million-plus market for single family homes, which comprises the majority of Calgary’s top-tier housing sales, experienced a 13% decline with 304 homes sold in the first six months of 2018, compared to 351 homes in the first half of 2017. With mounting supply and muted demand, downward price adjustments were common across the top-tier condo, attached, and single-family home markets, even as city-wide residential benchmark 2 prices held steady at $504,500 in May 2018 , down 0.4% year-overyear, and the Teranet-National Bank House Price Index for Calgary 3 recorded a 0.06% year-over-year uptick . In particular, high-end
As the City of Calgary heads into the third quarter of 2018, increased supply of homes priced over $1 million, and slow absorption rates mean that the market will remain heavily skewed towards buyers. Aggressive, informed pricing and marketing strategies are now imperative for sellers in a top-tier market that remains volatile and ever-changing.
CONDOMINIUMS
5
In face of rising inventory and softening consumer demand, Calgary’s $1 million-plus condominium market weakened throughout the first half of 2018. Overall, 17 properties sold in the first six months of the year, compared to six sold in 2017 during the same time period. 15 units sold between $1–2 million compared to four in the first half of 2017, while the $2–4 million segment saw two condominiums sell during the first six months of 2018, compared to the one sold in the same period last year. No properties sold above the $4 million-plus
1 The information contained in this report references market data from MLS boards across Canada. Sotheby’s International Realty Canada cautions that MLS market data can be useful in establishing trends over time, but does not indicate actual prices in widely divergent neighborhoods or account for price differentials within local markets. This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information and analysis presented in this report, no responsibility or liability whatsoever can be accepted by Sotheby’s International Realty Canada or Sotheby’s International Realty Affiliates for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. 2 Calgary Real Estate Board, May 2018 3 Teranet-National Bank House Price Index, May 2018 4 Statistics Canada, May 2018 5 Condominiums - CREB Property Type: Apartment; Condo Type: Conventional; Building Type: Lowrise Apartment, High Rise Apartment, Multi Unit
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price point in the first half of 2018, compared to one unit sold during this time in 2017.
first six months of the year, with 270 homes sold compared to 321 homes sold in the same period in 2017.
Sales velocity slowed significantly: the average number of days on market for condominiums over $1 million increased from 57 days in the first six months of 2017 to 88 days in the first half of 2018, reflecting soft demand and lack of urgency amongst buyers. Pricing in the top-tier market also adjusted downwards to match buyers’ market conditions.
Sales in the $2–4 million segment of the market saw a 17% increase, with 34 homes sold in the first six months of 2018, compared to 29 homes sold in the same period in 2017. There were no homes sold above $4 million during the first half of 2018, down from the one that sold in the first half of 2017. During the first half of 2018, 10% of single family homes sold above $1 million did so above listed price.
AT TACHED H OMES
6
Attached home sales over $1 million dipped 24% year-over-year from 38 units sold in 2017 to 29 in 2018. 28 properties sold within the $1–2 million price range, a 26% decrease compared to the first half of 2017. One attached home sold between $2–4 million in the first half of 2018 compared to zero during the same period last year. As in 2017, there were no attached homes sold over $4 million during the first six months of 2018.
SINGLE FAMILY H OMES
The average single family home prices in the luxury neighbourhoods of Aspen Woods, Upper Mount Royal, and Elbow Park were $1,100,384, $1,665,000 and $1,780,220 respectively in the first half of 2018. With the reinforcement of buyers’ market conditions, Calgary’s toptier market faces a steeper path to recovery as the city progresses into the third quarter of 2018.
7
Following an 8% year-over-year gain in sales volume in 2017 compared to 2016, the $1 million-plus single family home market saw a slowdown with an influx of inventory during the first six months of 2018. Continued economic uncertainty, the impact of rising interest rates and tightening mortgage lending guidelines resulted in a clawback of consumer purchasing power and confidence, setting back the incremental progress made in Calgary’s top-tier single family home market in the previous year. The city’s $1 million-plus single family home market saw a 13% decrease in activity in the first six months of 2018, with 304 homes sold, compared to 351 homes sold in the same period in 2017. Sales in the $1–2 million segment of the market saw a 16% decline in the 6 Attached Homes - CREB Property Type: Attached; Condo Type: Bare Land, Conventional, Not a Condo 7 Single Family Homes - CREB Property Type: Detached; Condo Type: Bare Land, Conventional, Not a Condo. .
TOP-TIER REP ORT, Calga ry SOT HEBYSRE ALT Y.CA 18
Calgary OVERALL MARKET # of Units Sold
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
313
37
0
Jul 1- Dec 31 2017
258
24
0
Jan 1 - Jun 30 2017
363
30
2
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
51
62
N/A
Jul 1- Dec 31 2017
51
83
N/A
Jan 1 - Jun 30 2017
47
70
107
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
9%
8%
N/A
Jul 1- Dec 31 2017
7%
8%
N/A
Jan 1 - Jun 30 2017
9%
17%
0%
Avg. # of Days on Market for Solds
% of Homes Sold Over List Price
TOP-TIER REP ORT, Calga ry SOT HEBYSRE ALT Y.CA 19
Calgary CONDOMINIUMS # of Units Sold
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
15
2
0
Jul 1- Dec 31 2017
5
1
0
Jan 1 - Jun 30 2017
4
1
1
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
94
46
N/A
Jul 1- Dec 31 2017
58
28
N/A
Jan 1 - Jun 30 2017
35
81
55
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
0%
0%
N/A
Jul 1- Dec 31 2017
0%
0%
N/A
Jan 1 - Jun 30 2017
0%
0%
0%
Avg. # of Days on Market for Solds
% of Homes Sold Over List Price
TOP-TIER REP ORT, Calga ry SOT HEBYSRE ALT Y.CA 20
C a l g a r y AT TAC H E D H O M E S # of Units Sold
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
28
1
0
Jul 1- Dec 31 2017
33
0
0
Jan 1 - Jun 30 2017
38
0
0
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
72
3
N/A
Jul 1- Dec 31 2017
55
N/A
N/A
Jan 1 - Jun 30 2017
60
N/A
N/A
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
0%
0%
N/A
Jul 1- Dec 31 2017
6%
N/A
N/A
Jan 1 - Jun 30 2017
3%
N/A
N/A
Avg. # of Days on Market for Solds
% of Homes Sold Over List Price
TOP-TIER REP ORT, Calga ry SOT HEBYSRE ALT Y.CA 2 1
C a l g a r y S I N G L E FA M I LY H O M E S # of Units Sold
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
270
34
0
Jul 1- Dec 31 2017
220
23
0
Jan 1 - Jun 30 2017
321
29
1
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
47
65
N/A
Jul 1- Dec 31 2017
50
85
N/A
Jan 1 - Jun 30 2017
45
70
159
% of Homes Sold Over List Price
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
10%
9%
N/A
Jul 1- Dec 31 2017
7%
9%
N/A
Jan 1 - Jun 30 2017
10%
17%
0%
Avg. # of Days on Market for Solds
TOP-TIER REP ORT, Calga ry SOT HEBYSRE ALT Y.CA 2 2
Calgary SAMPLE NEIGHBOURHOODS Condominiums
JAN 1 - JUN 30, 2018
# of Units Sold
Avg. Sold Price
Avg. Days on Market for Solds
AL T AD O R E
6
$298,167
51
ASPEN WOODS
11
$317,091
60
ELBOW PARK
0
N/A
N/A
L O W E R M O UN T R O YAL
25
$328,000
79
U P P E R M O UN T R O YAL
3
$244,500
55
# of Units Sold
Avg. Sold Price
Avg. Days on Market for Solds
AL T AD O R E
48
$811,079
49
ASPEN WOODS
15
$570,563
38
ELBOW PARK
0
N/A
N/A
L O W E R M O UN T R O YAL
2
$744,500
51
U P P E R M O UN T R O YAL
1
$306,500
49
Single Family Homes
# of Units Sold
Avg. Sold Price
Avg. Days on Market for Solds
AL T AD O R E
31
$1,021,392
37
ASPEN WOODS
54
$1,100,384
43
ELBOW PARK
25
$1,780,220
55
L O W E R M O UN T R O YAL
1
$999,400
36
U P P E R M O UN T R O YAL
10
$1,665,000
26
Attached Homes
TOP-TIER REP ORT, Calga ry SOT HEBYSRE ALT Y.CA 23
Greater Toronto Area TOP-TIER REPORT 201 8 MID -Y E AR RE AL ESTATE REP ORT
G re a ter T oro n to Are a 1 MARKE T SUMMARY2 Healthy consumer demand, confidence and market activity were restored in the Greater Toronto Area (Durham, Halton, Peel, Toronto and York) top-tier real estate market in the first half of 2018 following a temporary lull following the April 2017 implementation of the Ontario Fair Housing Plan. While recovery was tentative in areas outside of the City of Toronto, there were clear signals that the market for homes priced over $1 million has been experiencing a renaissance, particularly within the city. Stricter mortgage lending rules and rising interest rates disproportionately affected the market for real estate under or in the range of $1 million in the first half of 2018, reducing purchasing power, and redirecting many homebuyers into the condo market. However, the impact was less significant in the $2 million-plus market, where buyers were better positioned to absorb the increased costs. Given drastic, annual, historically unprecedented gains in the GTA’s $1 million-plus real estate market from 2015 to 2017, year-over-year comparisons of 2018 to 2017 mask the market resurgence underway as consumer and industry confidence renews. $1 million-plus residential real estate sales (condominiums, attached and single family homes) surged 56% in 2015 over 2014, 65% in 2016 over 2015, then peaked at historic records by the first half of 2017, which surpassed the highs achieved in the first half of 2016 with a 41% year-over-year gain to 14,292 units sold. In contrast, during the first six months of 2018, a total of 7,684 properties over $1 million sold in the GTA, a 46% year-over-year drop when compared to the historic
highs set in the first half of 2017. GTA sales over $4 million saw the sharpest percentage decline with 127 units sold, a 51% drop in the first half of 2018, compared to the same period the year prior. Within the City of Toronto, a total of 3,526 properties (condominiums, attached and single family homes) sold over $1 million and 91 properties sold over $4 million during the first half of 2018, a yearover-year decline of 32% and 52% respectively. The market for real estate priced between $1–2 million comprised the greatest sales volume of all segments, but reflected a 28% decrease with 2,760 units sold in the first half of 2018. 675 and 91 units sold in the $2–4 million and $4 million price categories respectively, a 43% and 52% decline from last year. Notably, 25% of properties over $1 million sold above list price in the GTA, while 41% did so in the City of Toronto, indicative of robust consumer demand that supported assertive buyer bidding strategies. Despite decreasing sales relative to 2017, 2018 sales volume trended above 2015’s healthy and active market conditions. GTA $1 millionplus real estate sales in the first half of 2018 were up 25% from the 6,152 units sold in the first half of 2015 while sales over $4 million were up 72%. Compared to the same period of 2015, sales over $1 million in the City of Toronto were up 14% in the first half of 2018, while sales over $4 million were up 44%. Tight supply continued to impact real estate prices throughout the first half of 2018. Conditions supported modest increases in the top-tier condominium and attached home segments, even as the Teranet-National Bank House Price Index for the Toronto market saw 3 a slight contraction of 0.34% year-over-year.
1 Durham, Halton, Peel, Toronto & York 2 The information contained in this report references market data from MLS boards across Canada. Sotheby’s International Realty Canada cautions that MLS market data can be useful in establishing trends over time, but does not indicate actual prices in widely divergent neighborhoods or account for price differentials within local markets. This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information and analysis presented in this report, no responsibility or liability whatsoever can be accepted by Sotheby’s International Realty Canada or Sotheby’s International Realty Affiliates for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. 3 Teranet-National Bank House Price Index, May 2018
TOP-TIER REP ORT, Gre ater Toro n to Are a SOT HEBYSRE ALT Y.CA 2 5
As land supply tightens, urban intensification has strengthened, spurring significant densification efforts by government and the private sector to increase supply. Both the redevelopment of the Port Lands, an 800-hectare parcel of waterfront property east 4 of the Toronto downtown core , and Port Credit, an expansive 5 redevelopment of a mixed-use waterfront property in Mississauga , exemplify the urban intensification taking place across the region. Despite a dip in economic growth in the Greater Toronto Area, the top-tier real estate market continues to benefit from a robust economy in the near-term, even as economists caution potential headwinds. Ontario’s real gross domestic product gains are projected to ease to 2.2% in 2018, while economic growth in Toronto will ease to 2.4% according to The Conference Board of Canada, a more 6 moderate pace compared to 2017.
CONDOMINIUMS
7
Year-over-year comparisons of condominium sales over $1 million to 2017’s historic highs distract from the strength of a sector buoyed by strong consumer demand. Sales were driven by local buyers, a confluence of demand from baby boomers, including a cohort moving back into the Toronto core from the city’s outskirts, as well as young families priced out of the attached and detached home markets seeking alternatives. Increased market momentum has also attracted local, domestic and foreign investors looking for long term holds. On the surface, GTA condo sales over $1 million decreased 13% in the first half of 2018 to 658 units, compared to 758 units sold during the same period in 2017. In the $1–2 million and $2–4 million price categories, sales decreased 15% to 570 units and rose 8% to 79 units in the first six months of 2018. Nine properties sold over $4 million
during the first half of the year, a 40% decline from the recordsetting 15 condominiums sold in this range in the first half of 2017. In the City of Toronto, $1 million-plus condominiums sales between January 1 to June 30, 2018 were also down year-over-year from 2017 records; sales were down 8%, with 599 units sold. The $1–2 million and $2–4 million price categories saw sales decrease by 8% to 516 units and increase by 6% to 74 units respectively, while luxury condo sales over $4 million fell 44% to nine units sold. Other key data points however, reflected healthy demand. In the GTA, 31% of condominiums sold over $1 million did so above list price, while 33% did so in the City of Toronto. Sales velocity remained at the brisk levels experienced during the record-setting first half of 2017: $1 million-plus condominiums spent an average of 25 days on the market in the GTA in the first half of 2018 compared to 22 days in the same period in 2017, while those sold in the City of Toronto spent an average of 23 days on market, the same as in the first half of 2017. Compared to healthy, but comparatively normalized activity in the first half of 2015, GTA condo sales over $1 million and $4 million were up 134% and 125% respectively in the first half of 2018. It is expected that top-tier condo sales will remain in high demand as this sector of the market continues to evolve and respond to the needs of young, urban families as well as a growing downsizer market.
AT TACHED H OMES
8
The GTA’s $1 million-plus attached home market remained strong throughout the first half of 2018, as demand for alternatives to single family homes strengthened and outpaced supply. In spite of a
4 Waterfront Toronto, 2018 5 Port Credit Business Improvement Association, 2018 6 Conference Board of Canada, May 2018 7 Condominiums - All Condo Types (Residential Condo & Other): Common Element Condo, Condo Apt, Condo Townhouse, Co-op Apt, Co-Ownership Apt, Detached Condo, Leasehold Condo, Locker, Other, Parking Space, Phased Condo, Semi-detached Condo, Time Share, Vacant Land Condo 8 Attached Homes - Attached/Row/Townhouse, Semi-Detached, Duplex (Residential Freehold)
TOP-TIER REP ORT, Gre ater Toro n to Are a SOT HEBYSRE ALT Y.CA 26
contraction in sales volume from 2017’s record highs, 57% of $1 million-plus attached homes sold above list price in the GTA after spending an average of 15 days on the market; 65% sold above asking price in the City of Toronto at an average 12 days on the market. This reflected the highest percentage of sales above list price, and the shortest number of days on market for the housing types in the region’s $1 million-plus segment. In the first half of 2018, overall $1 million-plus attached home sales volume fell 42% year-over-year to 806 units sold, with the $1–2 million segments of the market experiencing a 43% year-overyear decrease to 738 units, $2–4 million sales down 27% to 66 units, and $4 million-plus sales falling from three units sold to two. In comparison to 2015 figures however, GTA $1 million-plus attached home sales volume was up 112%. It is expected that the recent rate of price acceleration will continue over the coming months as increased demand and limited inventory continue to drive top-tier attached home sales.
SINGLE FAMILY H OMES
9
$1 million-plus single family homes sold above list price in the first half of 2018 across the GTA, while 36% did so in the City of Toronto. Relative to strong, pre-peak $1 million-plus sales volume in the first half of 2015, GTA single family home sales over $1 million were up 13% while sales over $4 million were up 66%. Although pricing trends reflected a tempering from previous years’ gains, with the average price of conventional single family homes contracting 5.6% year-over-year to $1,426,094 in the City of Toronto, 10 and down 8.2% to $1,045,553 across the GTA region in May 2018 , overall prices remained stable. The Teranet-National Bank House Price Index was steady with a 0.34% year-over-year dip in Toronto in May 2018. In the traditional luxury neighbourhoods of Bridle Path, Rosedale-Moore Park, and Lawrence Park, average single family home prices were $5,061,591, $3,541,431, and $2,147,221 respectively in the first half of the year. In the short term, the GTA top-tier market is expected to recover from last year’s market disruption as consumer psychology recovers from earlier policy interventions.
Compared to 2017’s historic sales highs, GTA sales over $1 million decreased 49% year-over-year to 6,220 units in the first half of 2018. 5,280 and 824 homes sold between January 1 and June 30, 2018 in the $1–2 million and $2–4 million ranges, a 46% and 60% decrease when compared to the same time last year. Sales over $4 million fell 52% from highs recorded in the first half of 2017, to 116 units sold in the first half of 2018. In the City of Toronto, 2,240 single family homes sold from January 1 to June 30, 2018, down 39% compared to the same period one year prior, while the $4 million-plus luxury home segment saw sales fall 53% year-over-year to 80 units sold. 20% of
9 Single Family Homes - Detached, Detached with Common Elements, Links (Residential Freehold) 10 Toronto Real Estate Board, May 2018
TOP-TIER REP ORT, Gre ater Toro n to Are a SOT HEBYSRE ALT Y.CA 27
G re a ter T oro n to Are a O V E R A L L M A R K E T # of Units Sold
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
6,588
969
127
Jul 1- Dec 31 2017
5,341
857
133
Jan 1 - Jun 30 2017
11,788
2,246
258
5, 2 17
861
74
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
24
28
45
Jul 1- Dec 31 2017
25
33
62
Jan 1 - Jun 30 2017
11
19
37
% of Homes Sold Over List Price
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
25%
24%
17%
Jul 1- Dec 31 2017
22%
17%
12%
Jan 1 - Jun 30 2017
68%
51%
28%
Ja n 1 - J u n 3 0 2015 Avg. # of Days on Market for Solds
TOP-TIER REP ORT, Gre ater Toro n to Are a SOT HEBYSRE ALT Y.CA 2 8
G re a ter T oro n to Are a C O N D O M I N I U M S # of Units Sold
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
570
79
9
Jul 1 - Dec 31 2017
464
68
6
Jan 1 - Jun 30 2017
670
73
15
Ja n 1 - J u n 3 0 2015
232
45
4
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
23
36
39
Jul 1 - Dec 31 2017
26
39
101
Jan 1 - Jun 30 2017
18
46
68
% of Homes Sold Over List Price
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
33%
16%
22%
Jul 1 - Dec 31 2017
23%
24%
0%
Jan 1 - Jun 30 2017
51%
30%
19%
Avg. # of Days on Market for Solds
TOP-TIER REP ORT, Gre ater Toro n to Are a SOT HEBYSRE ALT Y.CA 2 9
G re a ter T oro n to Are a A T T A C H E D H O M E S # of Units Sold
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
738
66
2
Jul 1- Dec 31 2017
620
31
2
1,295
90
3
354
26
0
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
15
12
20
Jul 1- Dec 31 2017
19
25
59
Jan 1 - Jun 30 2017
12
12
12
% of Homes Sold Over List Price
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
57%
52%
50%
Jul 1- Dec 31 2017
46%
45%
100%
Jan 1 - Jun 30 2017
76%
62%
33%
Jan 1 - Jun 30 2017 Ja n 1 - J u n 3 0 2015 Avg. # of Days on Market for Solds
TOP-TIER REP ORT, Gre ater Toro n to Are a SOT HEBYSRE ALT Y.CA 30
G re a ter T oro n to Are a S I N G L E F A M I L Y H O M E S # of Units Sold
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
5,280
824
116
Jul 1- Dec 31 2017
4,257
758
125
Jan 1 - Jun 30 2017
9,823
2,083
240
Ja n 1 - J u n 3 0 2015
4,631
790
70
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
25
29
46
Jul 1- Dec 31 2017
26
33
60
Jan 1 - Jun 30 2017
16
19
34
% of Homes Sold Over List Price
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
20%
22%
16%
Jul 1- Dec 31 2017
19%
16%
12%
Jan 1 - Jun 30 2017
68%
52%
29%
Avg. # of Days on Market for Solds
TOP-TIER REP ORT, Gre ater Toro n to Are a SOT HEBYSRE ALT Y.CA 31
G re a ter T oro n to Are a S A M P L E N E I G H B O U R H O O D S Condominiums
JAN 1 - JUN 30, 2018
# of Units Sold
Avg. Sold Price
Avg. Days on Market for Solds
ANN E X
154
$1,153,743
22
B R I DL E P A T H - S UNNY B R O O K - Y O R K M I LL S
28
$1,526,115
18
F O R E S T H I LL
40
$823,243
14
LA W R E NC E P A R K
24
$947,017
21
R O S E DAL E - M O O R E P A R K
80
$983,581
20
# of Units Sold
Avg. Sold Price
Avg. Days on Market for Solds
41
$1,908,107
18
B R I DL E P A T H - S UNNY B R O O K - Y O R K M I LL S
1
$1,049,000
8
F O R E S T H I LL
0
N/A
N/A
LA W R E NC E P A R K
29
$1,342,097
12
R O S E DAL E - M O O R E P A R K
17
$2,350,872
11
# of Units Sold
Avg. Sold Price
Avg. Days on Market for Solds
ANN E X
14
$2,930,050
19
B R I DL E P A T H - S UNNY B R O O K - Y O R K M I LL S
22
$5,061,591
27
F O R E S T H I LL
44
$3,329,659
21
LA W R E NC E P A R K
118
$2,147,221
13
R O S E DAL E - M O O R E P A R K
51
$3,541,431
22
Attached Homes ANN E X
Single Family Homes
TOP-TIER REP ORT, Gre ater Toro n to Are a SOT HEBYSRE ALT Y.CA 32
Montreal TOP-TIER REPORT 201 8 MID -Y E AR RE AL ESTATE REP ORT
Mo n tre a l M A R K E T S U M M A R Y 1 Following healthy market momentum in 2017 that drove $1 millionplus sales volume up 20% compared to 2016, top-tier sales activity in the City of Montreal continued at a strong tempo in the first half of 2018, hitting record levels and outpacing gains in competing major Canadian cities. To date, market gains have been unhampered by rising interest rates and new mortgage rules from Canada’s federal financial regulator that came into effect on January 1, 2018. Montreal has also been sheltered from provincial and municipal interventionist cooling policies aimed at addressing affordability that have moderated sales in cities such as Toronto and Vancouver. However, there are hints that gains in the $1 million-plus market will level off in the third quarter of 2018. Overall, real estate sales over $1 million (condominiums, attached and single family homes) experienced a 24% year-over-year increase in the first half of 2018, totaling 460 sales compared to 372 properties sold during the same period in 2017. $1–2 million sales rose 19% to 377 units. The $2–4 million-plus market exhibited strong percentage gains, with 80 units sold in 2018 compared to 51 units in 2017, representing a 57% increase. Real estate sales over $4 million fell to three units sold compared to five in the first half of 2017. Across all property types, supply was readily absorbed and home buyers confronted bidding wars in premier luxury neighbourhoods. Local demand dominated Montreal’s $1 million-plus market. Consumers were motivated by low interest rates and lifestyle considerations, and instilled by confidence given Quebec’s recent economic gains and political stability. According to Sotheby’s International Realty Canada experts, top-tier demand remained
largely driven by end users, rather than investment speculation. While foreign buyers have had minimal impact on Montreal’s toptier real estate market, international demand largely emerged from France, Europe and the U.S. Within the top-tier market, demand continued to place modest upward pressure on prices, mirroring trends in the conventional market which saw the Teranet-National Bank House Price Index 2 increase 3.64% year-over-year in May 2018. 3
Despite the Conference Board of Canada’s recent downward adjustment of 2018 economic growth projections to 2.2% due to manufacturing and construction output pull back, Quebec’s solid economic position, high quality of life, comparatively affordable real estate, world-class educational institutions and ongoing investments in public infrastructure, continue to position Montreal’s top-tier market for growth in the months ahead.
CONDOMINIUMS Condominium sales over $1 million rose 25% year-over-year to 81 condominiums sold compared to 65 in 2017. Multiple bidding wars sparked amongst purchasers, as a result, 14% of $1 million-plus condominiums sold above list price in the first half of 2018. From January 1 – June 30, 2018, 70 condominiums sold between $1–2 million on the residential resale market, a 27% increase from the year prior. There were 11 condominiums sold between $2–4 million during the first half of the year, up slightly from the 10 units sold in the first half of 2017. As in the previous year, no condominiums sold over $4 million on the resale market in the first half of 2018.
1 The information contained in this report references market data from MLS boards across Canada. Sotheby’s International Realty Canada cautions that MLS market data can be useful in establishing trends over time, but does not indicate actual prices in widely divergent neighborhoods or account for price differentials within local markets. This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information and analysis presented in this report, no responsibility or liability whatsoever can be accepted by Sotheby’s International Realty Canada or Sotheby’s International Realty Affiliates for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. 2 Teranet-National Bank House Price Index, May 2018 3 The Conference Board of Canada’s Metropolitan Outlook: Spring 2018
TOP-TIER REP ORT, Mon tre al SOT HEBYSRE ALT Y.CA 34
During this time a new record was set by Sotheby’s International Realty Quebec in Montreal’s luxury pre-sale condominium market: the sale of a 4,015 sq. ft. unit at the Four Seasons Private Residences Montreal listed at $8,050,000 set a new record for the highest price per square foot for condo sales in Montreal’s history. With strong local buyer demand and favourable demographic pressures, steady price escalation is expected to continue in Montreal’s high-end condominium market in the third quarter of 2018.
AT TACHED H OMES Montreal’s top-tier attached home market strengthened throughout the first half of 2018, with sales over $1 million increasing 58% yearover-year to 171 units as a result of increased consumer confidence and demand from buyers seeking affordable alternatives to single family homes. The average number of days on market for attached home sales over $1 million decreased to 49 days, and a significant 22% of these sold at above list price, the highest percentage amongst the housing types. Sales of attached homes between $1–2 million increased 51% to 159 units. In the $2–4 million segment, there was a minimal uptick in home sales; 12 properties sold compared to three in 2017 during the same time period. As in 2018, no attached homes sold over $4 million in the first half of 2017. Accelerated growth in the attached home segment is expected to continue in the second half of 2018.
SINGLE FAMILY H OMES Although Montreal’s condominium and attached home markets reflected robust gains in sales volume, the $1 million-plus single family home segment continued to comprise the majority of $1 million-plus sales during the first half of 2018. The uptick in sales activity has been less steep compared to previous years due to limited inventory, and there have also been indicators that demand, while strong, is levelling off. However, modest upward pressure on prices remains. Sales volume in Montreal’s $1 million-plus single family home segment was up 5% year-over-year compared to the first half of 2017, with 208 units sold in 2018 compared to 199 units sold the same year prior. Home sales decreased 5% in the $1–2 million price range with 148 units sold. $2–4 million sales increased 50% to 57 units, while the $4 million-plus single family home segment saw the sale of three properties in comparison to the five sold in 2017. The average number of days on market fell to 107 days and 11% of $1 million-plus homes sold did so above asking price. In the luxury neighbourhoods of Westmount, Outremont and Town of Mont-Royal, average prices of single family homes in the first half of 2018 were $2,719,650, $2,480,417 and $1,607,810 respectively. While the pace of year-over-year gains in sales volume is expected to stabilize, Montreal’s top-tier single family home real estate market is expected to remain strong, sustained by Quebec’s robust economy and strong consumer confidence.
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Mo n tre a l O V E R A L L M A R K E T # of Units Sold
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
377
80
3
Jul 1- Dec 31 2017
295
60
7
Jan 1 - Jun 30 2017
316
51
5
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
73
151
352
Jul 1- Dec 31 2017
104
147
265
Jan 1 - Jun 30 2017
98
206
262
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
16%
14%
0%
Jul 1- Dec 31 2017
12%
8%
0%
Jan 1 - Jun 30 2017
11%
6%
0%
Avg. # of Days on Market for Solds
% of Homes Sold Over List Price
*
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Mo n tre a l C O N D O M I N I U M S # of Units Sold
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
70
11
0
Jul 1- Dec 31 2017
44
11
2
Jan 1 - Jun 30 2017
55
10
0
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
96
273
N/A
Jul 1- Dec 31 2017
178
129
176
Jan 1 - Jun 30 2017
117
318
N/A
% of Homes Sold Over List Price
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
10%
36%
N/A
Jul 1- Dec 31 2017
7%
27%
0%
Jan 1 - Jun 30 2017
11%
30%
N/A
Avg. # of Days on Market for Solds
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Mo n tre a l A T T A C H E D H O M E S # of Units Sold
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
159
12
0
Jul 1- Dec 31 2017
98
1
0
Jan 1 - Jun 30 2017
105
3
0
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
48
69
N/A
Jul 1- Dec 31 2017
67
220
N/A
Jan 1 - Jun 30 2017
64
168
N/A
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
22%
25%
N/A
Jul 1- Dec 31 2017
14%
0%
0%
Jan 1 - Jun 30 2017
15%
0%
N/A
Avg. # of Days on Market for Solds
% of Homes Sold Over List Price
*
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Mo n tre a l S I N G L E F A M I L Y H O M E S # of Units Sold
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
148
57
3
Jul 1- Dec 31 2017
153
48
5
Jan 1 - Jun 30 2017
156
38
5
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
88
145
352
Jul 1- Dec 31 2017
107
150
300
Jan 1 - Jun 30 2017
114
179
262
$1-2M
$2-4M
$4M+
Jan 1 - Jun 30 2018
12%
7%
0%
Jul 1- Dec 31 2017
11%
4%
0%
Jan 1 - Jun 30 2017
8%
0%
0%
Avg. # of Days on Market for Solds
% of Homes Sold Over List Price
*
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Mo n tre a l S A M P L E N E I G H B O U R H O O D S Condominiums
JAN 1 - JUN 30, 2018
# of Units Sold
Avg. Sold Price
Avg. Days on Market for Solds
735
$404,395
64
H AM P S T E AD
17
$570,583
87
OUTREMONT
159
$554,839
56
T O W N O F M O N T R O YAL
118
$469,469
62
W E S T M O UN T
116
$790,365
69
# of Units Sold
Avg. Sold Price
Avg. Days on Market for Solds
114
$902,331
38
H AM P S T E AD
4
$779,500
21
OUTREMONT
24
$1,195,548
20
T O W N O F M O N T R O YAL
38
$1,007,119
34
W E S T M O UN T
75
$1,586,694
56
# of Units Sold
Avg. Sold Price
Avg. Days on Market for Solds
C Ô T E - D E S - N E I G E S / ND G
43
$976,166
43
H AM P S T E AD
26
$1,476,404
83
OUTREMONT
12
$2,480,417
106
T O W N O F M O N T R O YAL
62
$1,607,810
68
W E S T M O UN T
22
$2,719,650
126
C Ô T E - D E S - N E I G E S / ND G
Attached Homes C Ô T E - D E S - N E I G E S / ND G
Single Family Homes
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